CANDU 6 (EC6) and ACR-1000.Management of this business haspassed to CANDU Energy Inc., andCanadians will soon see what privateindustry can do with this opportunitygiven the current nuclear revival,which is being led by emergingeconomies.The development of the oil sandshas repeatedly faced difficult technicaland economic challenges. While privateindustry was the main driver andinvestor, public-sector actors played asignificant role, notably the AlbertaResearch Council and the Alberta OilSands Technology and ResearchAuthority (AOSTRA — created in 1974and wound down in 2000). Backed byindustry consensus and assisted byeconomic policy through such measuresas royalty and tax adjustments,these public-sector champions enabledthe development of the oil industrythat Canada has today: our largestexport earner and a huge wealth generatorfor the private and public sectors.

(the above is my weekly commentary that accompanied my sunday morning links mailing, which in turn was mostly selected from my weekly blog post on the global glass onion, and also includes other links of interest…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me…)

Saturday, August 25, 2012

Monday, August 20, 2012

I recently saw a newspaper photo of ten or twelve men sitting on a
crumbling stone wall beside a dirt road. It was somewhere in Africa, but
the location doesn’t matter. What matters is that the men, as the
caption made clear, were sitting on the wall because they had nothing
else to do: they had no land to farm, there was no local job or
employment available to them, they had no savings or credit with which
to start some venture. So they sat. Presumably there was
some place of charity they trudged off to at the end of each day, where
they got some food and water and a place to sleep; but when they awoke,
there was nothing really to do except go back and sit on the wall.
What is interesting to consider is the Conservative and Progressive
positions with respect to these men. The Conservative believes the only
thing that can improve their daily plight is the “free market”: Until
some local or regional entrepreneur organizes a tranche of capital and
starts a venture that requires the men’s labor, there is nothing to be
done except let them sit.
The Progressive believes that, in absence of the free market coming along and giving the men something to do, the sovereign government
ought to hire them to do something—anything really, like, for example,
getting off the wall and restacking the fallen stones so the wall is
tall and straight again. The Progressive argues that hiring the men to
do something—even if it’s just stacking stones in an orderly
fashion—puts into motion a virtuous cycle of benefits:

The men receive a wage which they will then spend in the local economy.

The new spending in the local economy will allow merchants to expand their businesses and hire more employees.

The pressure on charity to provide for people without income will be reduced.

The men will grow healthier, because they will be getting exercise
and eating better, and so fewer of them will end up on the steps of the
hospital begging for aid.

The men will be learning a skill—even if it just the stacking of
stones—and will be acquiring the daily habit of working for a living.

The nation’s roads will improve—if only because the stone walls alongside them are more orderly and pleasant to look at.

Because the men begin to create a viable work-force in a growing
local economy, “free-market” entrepreneurs will now be attracted to come
in and start ventures which can then hire the men away from their
stone-stacking, and grow the economy further.

The Conservative response to this Progressive’s strategy is built
completely upon a single question: How are you going to pay for it?
Where is the money going to come from to pay the men to get off the wall
and start stacking stones? This is the pivotal question where the
partisan debate becomes suddenly clouded with confusion. Implicit in the
Conservative’s question is the unspoken assumption that the financial
resources of the sovereign government come from the Private
Sector—either through taxes or borrowing. If the sovereign government is
going to spend on something—like, say, paying men a working wage for
stacking stones—then it must either tax or borrow to do so. The
confusion is created because both the Conservative and the
Progressive believe this to be an absolute, uncontested truth—a
veritable “law of nature.” Money for public spending comes from the
Private Sector. Where else could it possibly come from?
From the Conservative perspective, this incontrovertible belief means
the following things with respect to the Progressive’s strategy:

Working people (and, even worse, wealthy entrepreneurs) must be
penalized for their efforts by being taxed in order to pay idle men to
stack stones.

Alternatively, the sovereign government must borrow the money for
the men’s wages from the Private Sector, an act which will (a) drive up
interest rates (b) reduce the capital available for private investment
and entrepreneurship, and (c) saddle future generations with an enormous
debt they’ll have to somehow repay.

Hence the fairer and better approach of doing nothing, minimizing
tax burdens (especially on the wealthy entrepreneurs who are going to be
starting new ventures), and NOT sucking investment capital out of the
Private Sector by borrowing money our grandchildren will have to make
good on.

Given the options (taxing or borrowing from the Private Sector)
accepted by all, the Progressive can only respond to these Conservative
assertions with a few meek rejoinders:

Paying the men to stack stones has “social” benefits that wealthy citizens ought to be willing to invest in.

It is fair for people who have been blessed, and lucky
enough to be successful, to be taxed in order to help those less
fortunate pull themselves up.

As long as the borrowing remains below a certain percentage of GDP,
it is a reasonable and good “investment” that will expand the economy
and pay dividends in the long run.

Together, the Conservative assertions and the Progressive rejoinders,
create a self-deceiving and self-defeating dialog that has devolved
into nothing more than a shouting match: The building is burning, but
since we have agreed we don’t have enough water to put it out, we can
only argue about whether we’ll douse a little over there or a bit over
here. If I say it we ought to douse here, you scream that’s not fair—we
ought to be dousing over there instead. At what point in this futile
effort, I am wondering, will we stop shouting at each other and realize
the fundamental, almost silly, error in our thinking? Oh, look! We
actually do have all the water we need to put the fire out completely. Look! Over there! You see that great big water spigot? What have we been thinking?
In other words, what if it turns out the original, pivotal assumption
the Conservative assertions and Progressive rejoinders are built upon
is simply untrue? What if it turns out the sovereign government doesn’t need to collect taxes, or borrow from the Private Sector, to pay the men? What if the sovereign government, all by itself, can issue the currency required to put them to work stacking stones? What then?
I will not attempt here to outline the basics of Modern Monetary
Theory. I’ll leave that to the MMT economists who can do it
admirably—though, to date, their explanations seem mostly to fall on
deaf ears. (This is likely because everyone else is shouting so loud.)
What I’m interested in is how this new “reality”(if it were accepted by
each side) would alter the Conservative and Progressive positions
regarding the men on the wall.
It’s reasonable to suppose the original basic positions would be
unchanged: The Conservatives will still believe—with legitimate
merit—that the “free market” should come along and create jobs for the
men; that until that happens the men don’t really have “jobs”, and the
economy hasn’t really been expanded. The Progressives have no need to
refute this; in fact, they can happily and whole-heartedly agree with
it. Since they no longer have to defend the need to increase taxes or
borrowing from the Private Sector, they are free to both agree with the
Conservatives and to focus on the original virtuous cycle of
their strategy, which is now worth repeating. If the sovereign
government hires the men to get off the wall and start rebuilding it:

The men receive a wage which they will then spend in the local economy.

The new spending in the local economy will allow merchants to expand their businesses and hire more employees.

The pressure on charity to provide for people without income will be reduced.

The men will grow healthier, because they will be getting exercise
and eating better, and so fewer of them will end up on the steps of the
hospital begging for aid.

The men will be learning a skill—even if it just the stacking of
stones—and will be acquiring the daily habit of working for a living.

The nation’s roads will improve—if only because the stone walls alongside them are more orderly and pleasant to look at.

Because the men begin to create a viable work-force in a growing
local economy, “free-market” entrepreneurs will now be attracted to come
in and start ventures which can then hire the men away from their
stone-stacking, and grow the economy further.

The final “target” outcome of the Progressive strategy is identical
to the fundamental Conservative goal. If the Conservatives really want
to achieve this basic goal, how could they now argue against the
Progressive strategy? The only argument they could level is
that the strategy would be inflationary. The MMT economists, I believe,
have a plausible rejoinder to that. The bottom line is there is no
reason we have watch the building burn down: there is no need for men to
sit idly on a wall when it is possible to start a virtuous cycle that
will attract “free-market” entrepreneurs who will create jobs for them.
Is it possible that—except for this confusion about where sovereign
public money comes from—there is really no difference at all between the
Conservative and Progressive positions?

(the above is my weekly commentary that accompanied my sunday morning links mailing, which in turn was mostly selected from my weekly blog post on the global glass onion, and also includes other links of interest…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me…)

Friday, August 17, 2012

Following the conviction of Pussy Riot in Russia, Mark Knopfler has issued the following statement:

"Whenever a political regime or religious establishment refuses to
tolerate criticism, it advertises itself as repressive, backward and
insecure. This verdict will diminish Russia in the eyes of the world. I
condemn the prison sentences given to these young people and support the
right to protest for everyone."
- MK

TO PUTIN & ALL YOU GLOBAL OPPRESSORS

THE CURSE

May they neverReturn home at night...

May you have no part of eventide,May you have no room of your own,Nor road, nor return.May your days be all exactly the same,Five Fridays in a row,Always an unlucky Tuesday,No Sunday,May you have no more little worries,Tears or inspiration,For you yourself are the greatest worry on earth:

Thursday, August 16, 2012

“Only once in your life, I truly believe, you find someone who can
completely turn your world around. You tell them things that you’ve
never shared with another soul and they absorb everything you say and
actually want to hear more. You share hopes for the future, dreams that
will never come true, goals that were never achieved and the many
disappointments life has thrown at you. When something wonderful
happens, you can’t wait to tell them about it, knowing they will share
in your excitement. They are not embarrassed to cry with you when you
are hurting or laugh with you when you make a fool of yourself. Never do
they hurt your feelings or make you feel like you are not good enough,
but rather they build you up and show you the things about yourself that
make you special and even beautiful. There is never any pressure,
jealousy or competition but only a quiet calmness when they are around.
You can be yourself and not worry about what they will think of you
because they love you for who you are. The things that seem
insignificant to most people such as a note, song or walk become
invaluable treasures kept safe in your heart to cherish forever.
Memories of your childhood come back and are so clear and vivid it’s
like being young again. Colours seem brighter and more brilliant.
Laughter seems part of daily life where before it was infrequent or
didn’t exist at all. A phone call or two during the day helps to get you
through a long day’s work and always brings a smile to your face. In
their presence, there’s no need for continuous conversation, but you
find you’re quite content in just having them nearby. Things that never
interested you before become fascinating because you know they are
important to this person who is so special to you. You think of this
person on every occasion and in everything you do. Simple things bring
them to mind like a pale blue sky, gentle wind or even a storm cloud on
the horizon. You open your heart knowing that there’s a chance it may be
broken one day and in opening your heart, you experience a love and joy
that you never dreamed possible. You find that being vulnerable is the
only way to allow your heart to feel true pleasure that’s so real it
scares you. You find strength in knowing you have a true friend and
possibly a soul mate who will remain loyal to the end. Life seems
completely different, exciting and worthwhile. Your only hope and
security is in knowing that they are a part of your life.” Bob Marley

(the above is my weekly commentary that accompanied my sunday morning links mailing, which in turn was mostly selected from my weekly blog post on the global glass onion, and also includes other links of interest…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me…)

note on the graphs used here

in March a year ago the St Louis Fed, home to the FRED graphs, changed their graphs to an interactive format, which apparently necessitated eliminating some of the incompatible options which we had used in creating our static graphs before then...as a result, many of the FRED graphs we've included on this website previous to that date, all of which were all created and stored at the FRED site and which we'd always hyperlinked back there, were reformatted, which in many cases changed our bar graphs to line graphs, and some cases rendered them unreadable... however, you can still click the text links we've always used in referring to them to view versions of our graphs as interactive graphs on the FRED site, or in the case where an older graph has gone missing, click on the blank space where it had been in order to view it in the new format....